Medicaid: Can you keep paying a car loan and keep the car?

You are correct in that Medicaid allows for a car to be an exempt asset. But remember that Medicaid requires that all of the NH residents monthly income to be paid to the NH except for whatever is your states personal needs allowance. My mom's in TX and their allowance is $ 60 a month and it is expected that $ is to be used for their needs - like clothing or hair salon or cable fee at the NH.

You can keep the car or a house for that matter but all expenses has to be paid by others. Keeping up the car payments is the easy part - they just want their $ and whether you pay or Santa pays, they don't care. The bigger issue I see with a car is how is the insurance done? If the car is in her name, what happens with an accident? The insurance company will find out that she in fact lives in a NH and could deny the claim and then it's a mess and you could be on the hook and liable for all. You need to find auto insurance that does the policy to you and her. Whomever is DPOA can sign off on this for your mom too. Good luck.

HelpMe - this is going to be a bit long...so get a cup of coffee....neither the state or the NH is going to seize mom or dad's bank account or take their house per se, BUT the NH expects to be paid for their services (by private pay, or long term care insurance or via Medicaid) AND the state expects that mom or dad spend down their non- exempt assets to basically impoverishment level (+/- 2K) BEFORE the state will pay for their care in a NH through the Medicaid program. If they have $ in their bank account, that is considered assets to be spent to do that as is whatever they get for monthly income (like social security or other retirement or annuity).

If it's the situation where mom or dad's SS or retirement income is being pooled by the family (that mom/dad lives with or they live with mom/dad) to make ends meet, then this can become a sticky issue in a couple of ways: the state requires that all the elder's resources be used to pay towards their care via assets spend down and income paid each month to the NH thereafter. Each state allows for a very small amount of $ kept each month as "personal income allowance". The PIA varies by state, my mom is in TX and their PIA is $ 60 a month, another recent poster on this site said in CA it is $ 35 a mo for them. The PIA is really meant to provide for small things like hair salon @ the NH, clothing replacement or cable or phone monthly charges that Medicaid does NOT pay for. So there will be none of mom or dad's $ for the family to draw from to pay for their (family) expenses. If you are living in mom or dad's home or using their car, then you are expected to pay for whatever is needed to stay in the home (like mortgage, taxes, insurance, etc) or car expenses as mom will not have her SS income to do that anymore once she is in the NH.

Under Medicaid rules both the car and the home are exempt assets, so they do not have to be sold but mom will not have any $ to pay for their upkeep once in NH. This is why we so often hear "the NH is making us sell mom's house" that is not actually the case but if there is not the $ to pay for the house or car or living expenses by the family independent of mom or dad's $, that ends up happening.

One thing to think about if you have been living in mom's house for at least 2 years AND you have been taking care of her AND this has kept mom from going into the NH for that period of time, then the home will be exempt from the MERP (Medicaid Estate Recovery Program) aspect of Medicaid after mom passes away. You still have to pay for all for the house, but won't have to deal with the state coming after the proceeds from the sale of house after they die. You do still have to file for with with however MERP is done in your state though.

The Medicaid program has a 5 year look back on their finances & assets (required federally in order for the state to participate in Medicaid) and any $ transferred or spent or given to others or on things not for their health or their needs or their property can be viewed as improper for Medicaid compliance and they will get a transfer penalty applied if it occurs within the 5 year period. When you apply for Medicaid, you sign off on an all-access pass to their finances and asset search. Property records (like for house and car and land) are all recorded by the state via county records so all this info is just keystrokes away so you really can't get cute and hide stuff. The only asset that seem to come under the radar that I've heard of is oil & gas & mineral revenue and that imho seems to be because of how payments are structured and by & large payments are small (we're not talking Spindletop) and not done till it reaches a set amount so you might not get a check but every 5 - 10 years so often family don't even know that type of income is even out there. Really. But I digress, so Medicaid compliance is either about planning 5 years ahead of NH (right now that would mean seeing an attorney to get everything divested now (Nov 2012) so that they have no assets and do not plan on applying for Medicaid till Jan 2018. Or that if you don't have 5 years, then you face a possible transfer penalty for $ moved inappropriately within the last 5 years.

There are things you can do within this 5 year period to move $ that is within compliance but you really need to have an experienced elder care attorney do this. Also if you don't have other legal done or updates, this is good to just meet and pay for an attorney to get all this done now. One thing that can be done is a "personal services contract" in which mom or dad pay you a set amount every month for your caregiving or mangement of their affairs. This is dependent on your community standards for the amount paid and the attorney will know how to do this so that it is legal and passes Medicaid compliance.

It's my belief that there are many who take care of mom & dad beyond the point in which they can provide the level of care needed because they are interdependent on having mom or dad's SS or retirement$ in order to stay afloat. Also they and their parents really didn't realize how expensive NH can be and how difficult taking care of someone with dementia or other health issues of the elderly can be. It's really hard to take a hard cold realistic look at all this and this is when a good elder care attorney or geriatric case manager can help out. Good luck.

Igloo572 is also somewhat correct for California as well. Medicaid does allow for one car to be exempt it does not matter if the car is paid for or not. However, also here in CA if there is a car payment and the person is in a NH how will you continue to make the payments if all the monies except for $35.00 goes for the SOC. the insurance can be a problem as well. You should contact your local DSS office regarding the medicaid. Good Luck!

In California, Medical allows assest up to $2000.00 if the parent is a 1 person household. This is the same amount if they are in the NH or at home. A bank acct etc can be kept as long as the total balance does not exceed the 2000.00 at the end of the month. If there are 2 people a spouse then you are looking at what is call spousal improvishment which means the spouse left at home can keep assets up to $113,000.00 and most of the income before they talk about SOC.
I used to do this for a living and I currently work with a NH admissions. Good luck
you maybe should talk to an estate planning company.

For NH Medicaid eligibility, an individual must show that:
1) are 65+ (can be younger if qualified disability),
2) medical condition requires skilled level of nursing care,
3) monthly income at or below their states max (varies, about 2K),
This is the “income test”– how much $ do you make.
4) all countable assets are at or below 2K (higher if community spouse). This is the “asset test” – how much $ do you own.
5) not gifted away anything of value during 5yr look-back period.

If you do, could be a “transfer penalty” for gifting. Penalty based on each state’s NH daily reimbursement rate. For Texas, $ 142.92. So in TX if you gifted a car with a Blue Book value of 10K that would mean 70 days that Medicaid would not pay for the NH that would need to be private paid by family under Texas rate.

Look-back is up to 5 yrs. Most states require 3 – 6 mo. of all financials & property ownership documents with application.The NH usually will have a list of what you need to include. You sign off for state’s ability to access any & all records. State can require add’l documentation if something pique’s interest, like paperwork to establish if insurance is term or whole life or if there is a large transfer of funds.

INCOME: Exact income max is set by each state. Most states have “income” at $ 2,022 per mo but it can be more or less. TX is $ 2,094. Income is whatever $ they get monthly – retirement, SS, annuity, etc. If they get something that pays annually – like a dividend – it can be sticky if the amount of the dividend for that month takes them over the income max and you likely will have to do a specialized form to have it amoritized evenly by 12.

MILLER TRUST: If every month they are over the states income limit BUT not enough to pay NH in full for & qualify for NH in every other Medicaid way, then they can see an elder care attorney to do a "Miller Trust" or a "Qualified Income Trust". Say mom gets 1K SS & 1,500K from retirement. Income = $2,500. So income is $ 500 over ceiling for mo income. No matter what is always $500 over. So this excess $ 500 is what funds the trust & therefore mom’s income is now 2K and within the states income ceiling. Beneficiary of the trust is state's Medicaid program and upon death trust reverts to the state. Miller really has to be done by an attorney who does elder law as it needs to be flexible / adaptable and meet the criteria of each state's law on probate (death laws) & Medicaid rules & MERP (estate recovery).

PNA - For an individual in NH on Medicaid, all their income less has to go to the NH less whatever your state has or their personal needs allowance (about $60). Realistically if they have a home or car (which are exempt assets) there will be no real monthly $$ for the elder to maintain them (insurance, taxes, etc).

ASSETS: All assets are counted, unless the assets fall within the short list of "noncountable" assets:
- personal possessions,
- a vehicle (some states have a limit on the value)
- a principal residence, provided it is in the same state in which the individual is applying & the house may be kept with no equity limit if the "community spouse" lives there; otherwise the equity limit is about 500K (750K in some states)
- prepaid funeral (irrevocable, NCV, usually 10K max)
- small term life insurance (usually $1,500 & NCV)
All other assets must “spend down” to states max to qualify.

The financials are what most folks focus on. But remember that they also need to medically qualify for skilled nursing care under Medicaid medical criteria too.

Anyone can own a car, yet have someone else drive it.
The owner of vehicle is also liable, if it gets into an accident.
Numerous people who sell their cars, & fail to file a -Release of Liability- Form with the State Licensing office, can be sued for damages if that car they sold, sometimes YEARS ago, gets crashed/does damage.

NH=nursing home.
A person in nursing home is usually not in condition to drive a car; some officials assume that, but I do not think any rule mandates signing it over, unless debts are large, and, if the asset is wholly owned by the elder in the NH.
NH's may want to take over assets to help cover costs of keeping the person in the NH, or else Welfare will. MANY people have signed over their house, their car, etc. to help pay their stay at a NH.
The bills are just too high, & MediCare/MedicAid simply do not pay well enough.
Barring that, IF there is expectation the person will get out of the NH, & be able to drive, & is on Welfare, they can keep a car
...as long as it is a modest/cheap car.

The lien-holder on any asset doesn't care a fig who pays, as long as they keep getting paid.
And, it is not truly an asset, if bank actually owns it until it's paid off.

You wanting to drive the car, & keep your elder as the legal "owner" who is "making payments", but you are really using it & making the payments--?
---Perhaps if one has bad credit, & this arrangement allows one to keep driving---officials might question it--but Welfare really does not look too closely at that.
==Welfare cares what Assets a person has.
==MedicAID is part of State Welfare system, so application for Welfare is also for MedicAID. Welfare Dept. determines access to MedicAID. State Welfare/Medicaid are emergency stipends for those with no other resources: as long as one's assets are -under- the tiny, allowed limits to get Welfare, one gets it, until State runs out of money to help people with.

INSURANCE:
A driver who does not own a vehicle, or who drives many vehicles,
can buy insurance connected to their own driver's license,
rather than connected with a vehicle; it costs more.
BUT, in an accident:
fines, lawsuits & other nasty work, can be levied against the Owner of the car, no matter who drove it, as well as the Driver.
Not sure if there is any sort of waiver, disclaimer or other legal document, to prevent backlash litigation against a car's owner like that.
I think this is so in all of USA?

MediCARE is a Federal Program attached to Social Security.
It pretty much does not care what one's assets are; if you file for it & are qualified [enough work quarters paying into system, age & medical conditions, etc.], you get it.

Low-income Elders usually are on a combination of Medicare & Medicaid.
That usually means a Social Worker manages the case. Both NH and Welfare department will scrutinize assets, and determine what must be sold to pay the NH & medical bills. Not sure if they sell it, or if they let family sell it.
If bank owns car, resale is probly not large enough to make much difference, but officials can be snarky sometimes, and force selling off everything.
Though, sometimes, car can be gifted, if to family, & the value is puny.

Good luck! Hope things work out.

Can someone explain how Medicaid works when an elder parent must go into a nursing home and the elder parent has a bank account? What happens if the assets if the bank account is being utilized to keep the family aloat? Does Medicade sieze the entire account not allowing the family to make withdrawals for living and expenses? How does the family survive? Is there something that can be done to protect the assets and yet still have the elder person, if, when needed to go into NH?

In california there is no age limit for Long term care medical it is just if there is a need for Skilled Nursing. NH's do not determine medical but the local DSS office. Prepaid funeral funds if it is non refundable is exempt. Cementary plots are concidered property. Life insurances that can only be paid out if and when the person is deceased is exempt. Again property for a single person is $2000.00 for a couple with spouse staying at home is $113,000.00 with no income limits except that if a single person say has $500.00 monthly income then everything but the $35.00 would be concidered a SOC. If they have $3500.00 in monthly income then they would still only have $35.00 spending money. Now realize that we are talking state medicaid not Medicare. Each state has there own set of rules to administer medicaide but MEDICARE is a federal program and has a different set of rules. Since we do't know what state you live you should really contact you local DSS offfice or go on line for the correct info for you. Good Luck.

This very useful information n understandable too. Thanks for sharing.